Regulatory Road Not Clear for Taxi Apps

Hiring a ride by smartphone is getting yellow lights from local governments from California to New York, spurring a debate about the role of regulators in new markets.

A slew of start-ups, including Uber Technologies Inc., Zimride Inc., SideCar and Tickengo Inc. say demand is soaring for their services, which let people use apps to hire traditional cabs or bigger, more luxurious sedans.

In smartphone-connected San Francisco, where most of the services have originated, riders use an app such as Zimride’s Lyft to request a ride from a nonprofessional driver.

Regulators say many of the services violate the law, and, in the case of the unregulated drivers, pose public-safety concerns.

On Monday, New York City’s Taxi and Limousine Commission is scheduled to issue proposed guidelines for taxi apps that would for the first time permit electronic hailing of taxis with smartphones—but also require the companies to make changes in order to enter the market.

In Chicago, a city agency said last week it had issued three citations to Uber for requiring customers who use its taxi-hailing app to add a 20% tip onto metered cab rides.

And California’s Public Utility Commission said it has sent cease-and-desist letters to four app companies for running what it considers unlicensed limo services.

So-called e-hailing services typically work like this: People in need of a ride request one on their phone, and the apps use a smartphone’s GPS function to send an available car, even giving the user a map view of the car’s location and approximate arrival time.

Comments (1 of 1)

Amazing regulators think the apps are illegal but San Francisco taxi companies are not required to carry uninsured motorist coverage. I thought it was a state law that everyone needed to carry this insurance!